June 2012 Oil & Gas

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Transcript of June 2012 Oil & Gas

Page 1: June 2012 Oil & Gas
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Dix Communications - Oil & Gas June 2012 Edition 1

A MONTHLY PUBLICATION

JUNE 2012

SHALE DEVELOPMENTA GAME CHANGER FOR U.S.

ENERGY PRODUCTION

FROM EXPLORATION TO EXPECTATIONS:

INSIGHTS ON THE INDUSTRY

HIGHER EDUCATION

RAMPING UP OIL

AND GAS TRAINING

DEMAND FOR WORKERS

PICKING UP

SEVEN TIPS FOR

LANDOWNERS

SIGNING LEASES

Andrew S. [email protected]

G.C. Dix [email protected]

Ray BoothExecutive [email protected]

Cathryn StanleyRegional [email protected]

Niki WolfeRegional [email protected]

Ed ArchibaldSE Ohio Sales Cambridge, Ohio Offi [email protected] 740-439-3531

Peggy Murgatroyd,SE Ohio Sales Barnesville andNewcomerstown, Ohio Offi [email protected] Barnesville 740-498-7117 Newcomerstown

Jeff KaplanNE Ohio Sales Alliance & Minerva, Ohio Offi [email protected] 330-821-1200

Owen WilliamsLayout Designer

“Oil & Gas” is a monthly publication jointly produced by Dix Communication newspapers across Ohio. Copyright 2012.

Cover Photo by: Sarah Gordon, Ashland Times-GazetteCrews from Halliburton, a company contracted by Devon Energy, work on the horizon-tal hydraulic fracturing phase of a well in northern Ashland County.

◆ Shale Development A Game Changer............pg. 2

◆ Expert says development will

take some time .............................................pg. 4

◆ Programs Available to Educate Workers .........pg. 6

◆ 7 tips for landowners .......................................pg. 8

◆ ‘Get an attorney’ ............................................pg. 10

◆ ‘It’s all about the jobs,’ ...................................pg. 12

◆ A ‘tsunami’ that smells like money ................pg. 16

◆ Force Incorporated bringing jobs

to Belmont County .......................................pg. 18

◆ Region studies use of roads for

oil and gas industry ......................................pg. 22

◆ Industry takes ‘STEPS’ to be safe .................pg. 24

◆ For Eastern Ohio, these days, business

is good .........................................................pg. 26

◆ Oil in the early days ......................................pg. 30

◆ Infi nity Oilfi eld Services opens

site in Newcomerstown ................................pg. 32

◆ It’s happening here,

it’s happening now .......................................pg. 34

◆ Ohio Well Activity by the numbers ................pg. 36

◆ Industry leader comes

to Southeast Ohio ........................................pg. 38

◆ Top Ohio Counties with Horizontal

Drilling Activity .............................................pg. 42

◆ Association opposes Kasich proposal ..........pg. 44

◆ Senate passes bill, creates annual

environmental award for oil and

gas drillers ...................................................pg. 45

◆ Oil & Gas Fact Sheet ....................................pg. 46

Table of Contents

Attributions

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Oil & Gas June 2012 Edition - Dix Communications2

Shale DevelopmentA Game Changer for U.S. Oil and Natural Gas Production

As recently as the late

2000s, the U.S. ener-

gy picture was bleak.

By 2008, U.S. oil production

had declined steadily from its

1970s peak. Natural gas pro-

duction was on a similar down-

ward spiral. Already import-

ing 80% of its crude oil needs

(costing more than $1 billion

each day!), forecasts were for

increased natural gas (LNG)

imports to meet future U.S. en-

ergy needs.

37% of U.S. energy needs come from oil, primarily for trans-

portation fuel. 25% currently comes from natural gas. The rest

comes from coal (21%), nuclear (9%), and renewable sources

(8% including hydroelectric, ethanol, wind and solar). The

cleanest burning of all fossil fuels, natural gas is used for elec-

tric power generation, heating, and feed stock for plastic, fertil-

izer and other important chemicals. A small portion is used for

transportation fuel.

Fortunately, in less than 10 years, new technology has

changed the game for U.S. oil and gas producers, making it

economical to recover large amounts of oil and gas that are

locked deep underground in shale and tight sands plays. U.S.

oil production is ramping up steadily, increasing more than 5%

per year since 2008 thanks largely to two shale bonanzas - the

Bakken play in North Dakota and the Eagle Ford play in Tex-

as. Many producers are forecasting similar potential from the

Utica Shale in Eastern Ohio.

Natural gas production has increased so much that under-

ground storage capacity is full and wellhead prices are down

Norm Shade

“Natural gas production has increased so much that underground storage ca-pacity is full and wellhead prices are down to mid-1990s levels.”

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Dix Communications - Oil & Gas June 2012 Edition 3

to mid-1990s levels. Gas imports peaked in 2007 and have

fallen markedly ever since. According to the U.S. Department

of Energy’s Energy Information Administration (EIA), shale

gas, not much of a factor 5 years ago, accounted for more than

32% of U.S. production in 2011. Industry experts estimate that

developable natural gas reserves are vast enough to supply the

country’s needs for more than 100 years at current rates of con-

sumption. Barnett in North Texas, Fayetteville in central Ar-

kansas, and Haynesville in Northwest Louisiana are all prolific

shale plays that have led the rapid turnaround in U.S. produc-

tion. And there is significant upside as newer plays like the

Marcellus and Utica Shale are developed. Both of these plays,

which extend into the Eastern part of Ohio, are believed to hold

vast recoverable deposits of natural gas and oil.

Responsible production from shale plays will greatly reduce

the need for imports, and some optimists predict that the U.S.

can become energy independent by the end of the decade. Not

only does domestic energy production create lots of jobs and

wealth for producers and lease holders, development of these

plays is important for our national security.

W. Norm Shade

President of ACI Services Inc. Headquartered in Cam-bridge, OH. ACI is a leader in the manufacture of custom engineered gas compressor products used throughout the world. Shade received BME and MSME degrees from The Ohio State University, graduating Summa Cum Laude in 1970, and he is a registered professional engineer in Ohio, Oklahoma and Texas.

Before heading ACI in 2004, he spent 32 years in various engineering and management roles with Cooper Cameron Corporation (now Cameron International) and 2 years de-veloping his own Houston, TX based consulting company that continues to provide market research and technical

services to major companies in the oil and gas industry. He has authored more than 170 technical papers and articles, and serves as a regular Contributing Editor for COMPRES-SORTechTwo magazine, a monthly gas machinery journal.

Shade is on the Advisory Board of the Gas Compressor Association and is active in the Gas Machinery Research Council, INGAA and the American Society of Mechanical Engineers, having chaired various committees. In 2000, he was named a Fellow of the American Society of Mechani-cal Engineers, recognizing his career achievements in the engineering fi eld; and he has received many other awards including the ASME Distinguished Service Award and the Ohio State University E.G. Bailey Entrepreneurship Award.

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During a recent inter-

view with geologist

and oil and gas pro-

ducer David R. Hill, several

topics were presented to Hill

to enlighten the masses on the

status quo of the oil and gas

industry, from exploration to

expectations to the proposed

severance tax to Senate Bill

315.

First and foremost Hill said,

“although we are smack dab in

the middle of the oil window”

[of the Utica Shale Play], we have to “temper our expecta-

tions ... and be cautiously optimistic.

“A lot of this information is theory, as more wells are

drilled and we get more data points (information), maps will

be redrawn to coincide with current or newly discovered

data.”

Relative to the projection of the number of jobs created in

southeastern Ohio, Hill stands by the

results of an economic impact study

by the Ohio Oil and Gas Energy

Education Program released in 2011,

which estimates Ohio’s job market

will demand more than 200,000 jobs,

and industry wages would climb to

more than $12 billion in annual sala-

ries and personal income to Ohioans,

by 2015. Job growth for 2012 is

estimated at 22,297.

The study stated jobs would

involve leasing, royalties, explora-

tion, drilling, production and pipeline

construction to produce oil and gas from the Utica Shale Play.

Hill agrees with the volume of jobs created by the industry,

but is less optimistic about it all happening by 2015.

“If Ohio grows at the same pace as Pennsylvania, we could

benefit from approximately 200,000 jobs within the next five

years,” he said. “From leasing to actual production, approxi-

mately 200 different job classifications will have a hand in

developing that well.

“It is also estimated that Ohio would benefit from $1.054

billion in tax revenue if the industry is allowed to develop

under the existing tax code.

“In addition to the proposed increase in the severance

tax levied on the industry, oil and gas companies also pay

sales tax, commercial activity taxes, fuel use taxes, personal

income taxes, and ad volorem

taxes. The ad volorem tax is Latin

for ‘according to value.’ Property

ad valorem taxes are incurred

through ownership of an asset and

are the major source of revenue

for local governments. Ad vol-

orem taxes are roughly equal to 1

percent of gross sales, that money

goes back to the county where

the well exists. Of the money sent

back to the county, 71 percent goes to the local school district

where the well is located. Ad volorem taxes benefit the local

economy.

“The severance tax is a gross receipts tax. Generally, the

landowner and the oil company are subject to the severance

tax. Raising the severance tax means landowners will send

10 percent of their royalties to Columbus (Based on 4 percent

severance tax on high volume wells, and a 6 percent state

income tax).

The average cost to drill a horizontal well is approximately

$8 million. The difference between

the Marcellus Shale, which covers

a thin strip of eastern Ohio, and the

Utica Shale, which covers about half

of Ohio, is the Marcellus is “dry

gas,” whereas the Utica is a “wet

gas” and/or oil reserve.

Although there is currently no

fully defined quantitative definition

of a wet gas flow that is universally

accepted, what constitutes the value

of wet gas is the concentration of

ethane, propane, butane and other

gas by-products. Methane is indig-

enous in both wet and dry gas.

“All of Ohio has a stake in the development of the oil and

gas industry,” said Hill. “Senate Bill 315 is currently being

debated in the legislature to strengthen well construction

requirements. Virtually all mishaps in the hydraulic fracturing

process may be traced back to faulty well construction. The

Ohio Oil and Gas Association is fully engaged in the process.

I am convinced common sense will prevail.”

David R. Hill has 32 years of experience in the oil and gas industry. He is the secretary/treasurer for the Ohio Oil and Gas Association, and a member of the American Association of Petroleum Geologists. He has served on the OOGA technical advisory council under the Taft, Strickland and Kasich admin-istrations.

InterviewExpert says development will take some time

Judie PerkowskiDix Communications

“If Ohio grows at the same pace as Pennsylvania, we could benefi t from approx-imately 200,000 jobs with-in the next fi ve years.”

David R. Hill

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Recognizing the need to prepare for the infl ux of workers in the oil and gas industry, several local col-leges and universities offer a number of programs and courses:

ZANE STATE COLLEGE (ZANESVILLE)The Natural Gas Engineering Technology associate de-gree program includes classroom, laboratory and fi eld experiences.A sample course curriculum covers: Natural gas distri-bution and compression; petroleum geology; oil and gas reservoirs; formation evaluation; industrial mechanics; drilling methods/operations; fi eld services; natural gas production; mineral rights and leases; world regional ge-ography; physics; introduction to mechanical modeling; and general chemistry.Curriculum also includes an internship.For program information contact Engineering and En-ergy Science Professor Daniel Durfee, 740-588-1282 or [email protected] or visit www.zanestate.edu.

BELMONT TECHNICAL COLLEGE(ST. CLAIRSVILLE)

NGT 100 - Introduction to the Oil and Gas Industry is a 5 1/2 week 4-credit course beginning on July 3 and meet-ing Tuesdays and Thursdays from 5:30 to 9:30 p.m. at the main campus. End date is Aug. 7.This course provides a survey of the oil and gas industry, it’s history, development, infl uence on society and work politics, and its current state. The course will cover con-cepts of petroleum discovery, geology, production, trans-portation, refi ning, marketing, and economics.Course learning outcomes include: To introduce the pe-

troleum industry from in-ception to the present;

to review the history of petroleum and natural gas development as a function of changing society and technol-ogy; to explore the discovery, geologic development, and

technology of oil and gas pro-

d u c -

tion; to introduce the techniques of modern on and off shore exploration and production; to review domestic andworld markets for oil, gas, and their many derivative prod-ucts; to explore current world use, future demand, and alternatives; and to introduce U.S. and state regulationson the industry.For registration information call 740-699-3809 or visit www.btc.ed.

WASHINGTON STATE COMMUNITY COLLEGE (MARIETTA)

New programs and courses offered for credit include: Geoscience; Geotechnical Drafting; Private Security Academy; and Introduction to the Oil & Gas Industry.Existing programs and courses to support the oil and gasindustry include: CAD Drafting; Electronics; IndustrialMachining & CNC; Instrumentation, Control & Electrical; Process Technician; Chemical Operator Online; and Die-sel Truck Technician.For program information contact Dean of Business, En-gineering & Industrial Technologies Brenda Kornmiller, 740-374-8716 or [email protected] or visit www.wscc.edu.

MARIETTA COLLEGE (MARIETTA)Bachelor of Science degree offered in petroleum engi-neering. Courses required of all petroleum engineeringmajors include: Petrophysics; Core Analysis Laboratory;Drilling and Completion Fluids; Well Control and Casing Design Laboratory; Hydrocarbon Phase Behavior; Res-ervoir Engineering; Drilling Engineering; Production Sys-tems Engineering I; Production Systems Engineering II;Formation Evaluation; Enhanced Recovery; Natural Gas Engineering; Transient Pressure Analysis; and SeniorCapstone Design Seminar.For program information contact Dr. Robert W. Chase, 740-376-4776, or visit www.marietta.edu

KENT STATE UNIVERSITY (KENT)The Oil and Gas Management Certifi cate is designed to enable industry executives, senior budget-holders anddecision-makers in investment banks, consultancies,government agencies and large multinational corpora-tions to evaluate and manage risk and exploit business opportunities in the global oil and gas industry.The course includes three modules: Module I, ProjectManagement in Oil and Gas – Managing Resource; Mod-ule II, Oil and Gas Accounting – Oil and Gas Operations and Costing; and Module III, Essentials of Leadership.Cost includes an Apple iPad 2 pre-loaded with course materials.The course is offered during the summer and fall to suit an organizations’s schedule. May be arranged for a group of 20 or more. For further information, contact Dr. Pratim Datta at [email protected] or Pam Silliman at [email protected] orvisit www.kent.edu.

Programs Available to Educate Workers

troleum industry from in-ception to the present;

to review the history ofpetroleum and natural gas development as afunction of changingsociety and technol-ogy; to explore thediscovery, geologicdevelopment, and

technology of oil and gas pro-

d u c -

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Many landowners in

eastern Ohio have

been disappointed

because they signed an oil

and gas lease too quickly.

By “too quickly,” we mean

the lease was signed without

a full understanding of the

words in the lease, or because

nearby landowners got better

terms – including more lease

bonus and higher royalty – or

because the landowner did not

understand the process that oc-

curs after signing and prior to

the landowner receiving payment of the lease bonus.

Therefore, we offer the following “Seven Secrets” to assist

landowners who are considering signing an oil and gas lease:

1. There is no such thing as a Standard Form Oil and Gas

Lease.

2. Every paragraph/word of an oil and gas lease (and related

documents) is negotiable.

3. The Landowner wants many landowner friendly terms in

the lease. These terms should protect the landowner’s surface,

sub-surface, water, agriculture and other rights and activities.

4. The Landowner needs to understand every word of an

oil and gas lease prior to signing, including the importance of

implied covenants; this recommendation also applies to docu-

ments which may be related to the lease such as “Order of Pay-

ment,” “Amendment to Lease,” “Memorandum of Lease,” and

“Easement.” (An Easement is not a lease, but a permanent

grant of real estate rights.)

5. The Landowner wants the oil and gas lessee to be an oil

and gas company (“OGC”) with the technical and financial ca-

pability to competently drill, produce, and operate a well or

wells. The reputation of the OGC in the oil and gas industry is

also important.

6. The Landowner wants the lessee to sign the lease (most

oil and gas leases are set up so the lessee does not sign) and the

related documents.

7. The Landowner always wants to retain a copy of any

signed oil and gas lease and the related documents (with signa-

tures of both the Landowner and the lessee).

Landowners who spend sufficient time to educate them-

selves generally about the oil and gas business and benefit from

these Seven Secrets may end up happier than those landowners

who sign an oil and gas lease too quickly.

7 tips for landowners

J. Richard EmensEmens & Wolper

Law Firm

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Dix Communications - Oil & Gas June 2012 Edition 9

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Oil & Gas June 2012 Edition - Dix Communications10

Presenting detailed in-

formation about older

oil and gas leases at

the Buffalo Campus of the

Mid-East Career and Tech-

nology Center recently,

Dale Arnold said the best

advice he could give them

was to “get an attorney.”

Arnold is director of Energy,

Utility and Local Government

Policy at the Ohio Farm Bu-

reau.

“Leases are very complex ...

Get an attorney,” said Arnold. “Your lease may have changed

hands many times since the original owner signed on, and you

may now have a new business partner ... Get an attorney.”

“Twenty five percent of leases in Ohio are new leases, 75

percent are older leases. An oil and gas lease is defined as a le-

gal deed by which a landowner authorizes exploration for and

production of resources on his/her land; usually in consider-

ation of a royalty.

“Many farm families have handed down leases through gen-

erations. The original owner is gone, and the family-owned

small oil company has been bought and sold several times. So,

who is the legal owner? The only lease that is enforceable is

the one on file in the county recorder’s office, witnessed and

notarized. The lease is still good even if the landowner or the

company is gone,” he said.

Take the time to get to know your new business partner. Ask

questions. Just as important is your legal counsel. Ask legal

counsel how many years of experience he/she has working

with complex leasing/contracts used in energy and utility-re-

lated issues. Are they familiar with different types of energy

technology being used today. Do you have access to financial

planning resources for the farm (business functions, taxes, etc.)

and family, (estate planning, gifts, trusts, multi-generation ben-

efits, taxes, etc.). Do you have access to family counseling ser-

vices, philanthropy and working with local foundations.

When you acquire a lot of money, you should ask yourself

if you want to give it to a community charity, like a church,

school or civic organization, or do you want to give it to the

tax man?

“Every lease is unique. A lease is a basic implied covenant

where anything and everything is negotiable — within reason.

“And, most important: Do Not Cash the Check, until your

attorney has read, understands and has communicated to you

about immediate tax ramifications, and everything clause in

‘Get an attorney’ to study older leases

Judie PerkowskiDix Communications

j

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Dix Communications - Oil & Gas June 2012 Edition 11

the lease. Once again, get an attorney. It is worth every penny,”

said Arnold.

Arnold also advised the group

to know and understand the

workings of the Ohio Depart-

ment of Natural Resources.

“The ODNR is your police

force. The oil and gas division

regulates, inspects and enforces

rules for oil/gas drilling, operat-

ing, production operations for

brine disposal, underground in-

jections wells, and every phase

of drilling and capping wells.

You can also track oil and gas

permits, project completions,

production reports, the name of

the well, the name of the oil/gas

company and the stage the drill-

ing process is in. And, all infor-

mation is updated weekly.

It has been reported several

times about the anticipated re-

sults from the Marcellus and

Utica Shale formations. The

Marcellus covers a thin strip of

eastern Ohio and contains dry

gas reserves. The Utica Shale Play has wet gas, which lies

beneath the Marcellus and covers about a third of Ohio. The

Utica is expected to produce 5.7

billions barrels of oil.

“Anyplace you have seen oil

and gas production in Ohio, it’s

approximately 40 to 60 percent

of what lies below the surface ...

The oil companies are coming

back to get the rest,” he said.

For more in-depth information

of Arnold’s presentation in PDF

format, and/or a list of experi-

enced oil and gas attorneys, call

or email: Dale Arnold, Director,

Energy Services Ohio Farm Bu-

reau Federation at 614.246.8294

or Email: [email protected].

For the Ohio Department of

Natural Resources Oil & Gas

Resources Management, call

(614) 265-6922 or visit WWW.

ODNR.com.

[email protected]

“Many farm families have handed down leases through generations. The original owner is gone, and the family-owned small oil company has been bought and sold several times. So, who is the legal owner? The only lease that is enforceable is the one on fi le in the coun-ty recorder’s offi ce, witnessed and notarized. The lease is still good even if the landowner or the company is gone...”

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Oil & Gas June 2012 Edition - Dix Communications12

“Things are start-

ing to pick up

again,” said Sue

Thomas Sikora, Cambridge

manager for the Opportuni-

ty Center, part of the “One-

Stop” system that, in addi-

tion to Guernsey, includes

Muskingum, Coshocton and

Licking counties.

“The oil/gas companies

were involved in planning, sur-

veying, leasing and explora-

tion,” Sikora said. “They also

requested a wage analysis for the area. All those things take

time.

“We are now experiencing an upswing, albeit slowly, in

requests for people, and it’s not just in the oil and as industry.

The increase is in all sectors of businesses. Business owners

are beginning to evaluate their needs. It is evident by the in-

crease in the number of job orders

we receive ... They are more con-

fident and have begun expanding

and adding more jobs.

“We are really in a good place

for employment in general, across

the board. We all have been so

preoccupied with Chesapeake and

Halliburton, but small business

owners are beginning to benefit

from the demand for goods and

services.

“We are moving in the right

direction. The market has shifted,”

she said. “Our mission is to keep jobs here. If you want to

work, I can find you a job ... and veterans receive priority

status.”

The One Stop is the regional office for companies looking

for fill a multitude of jobs. After filling out an application and

going through the pre-screening process. Pre-screening helps

the job applicant understand the process and makes the com-

mitment. The office provides job leads, helps applicants learn

how to look for work online, how to fill out applications, how

to fill out a resume, what to do and what not to do during the

interview process, and what kind of training might be required

for a particular job opening.

The job opportunities are updated daily online at guern-

seyworks.com. “The oil and gas companies in our area are

looking for truck drivers, truck drivers and more truck drivers.

But, the jobs are for CDLs-plus. Which means they need to do

more than drive. It’s lots of heavy, dirty work. You are part of

a team that tears down rigs,” Sikora said.

Sikora said the training program for getting a CDL is about

$4,000 for a five-week train-

ing course. There is a federal

grant for the course for people

who qualify. If you are laid

off from a job, you must be

eligible for or are receiving

unemployment benefits. There

are also income limitations.

For example, income for a

family of four cannot exceed

$46,100. If there is no federal

money, One Stop will work

with any school for assistance.

Also in demand are welders,

heavy equipment operators, people skilled in heavy manu-

facturing and outdoor construction, in addition to general,

manual labor. The oil and gas companies prefer to hire people

who live within one or two hours of the work site.

Also on the horizon is a 30-hour oil and gas industry career

training program for land men and abstractors at the Career

Center for Adult Technical Train-

ing in Caldwell. No experience is

required and there is on-the-job

training. Call for details and/or to

register at (800) 648-3695 or on-

line at www.mycareerschool.com.

Tuition is $549.

An abstractor is someone

who gathers information from a

variety of sources and presents it

in a unified document called an

abstract, which discusses the most

important and pertinent pieces of

information from these sources.

Abstractors are employed in the information science sector,

and they can work in a wide range of industries. As an ab-

stractor for the oil/gas industry obtains information primarily

about land leasing.

“This program is the first of its kind in this area. Call One

Stop at (740) 432-2381, or visit the office at 324 Highland

Ave. to see if you qualify for any portion of the tuition,” said

Sikora.

[email protected]

‘It’s all about the jobs,’ says One Stop director

Judie PerkowskiDix Communications Sue Sikora

“We are really in a good place for employment in general, across the board. We all have been so preoc-cupied with Chesapeake and Hal-liburton, but small business owners are beginning to benefi t from the demand for goods and services.

Drill string Drill•string noun: A column, or string, of pipe that transmits drilling

fluid (via the mud pumps) and torque (via the Kelly

drive or top drive) to the drill bit.

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Page 16: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications14

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Page 17: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 15

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Page 18: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications16

‘Some will get paid

and some won’t.’

I have heard this

several times from a local

oil and gas man. From per-

sonal experience, I know

this to be true. But, it isn’t

always the oil and gas guys

who don’t get paid. We

are in the middle of a gold

rush the likes of which we

haven’t seen in a long time.

Like most, I have deep ties

to Guernsey County, and I am

also a history teacher who has

enjoyed many hours pursuing the history of this area. Perhaps

the greatest times here were the 1880s when General A.J.

Warner, who was from time to time a congressman from this

area, bought up a lot of the coal rights in the area and also was

the key figure in establishing a railroad from Cambridge to his

home area in Marietta.

From that point on, Guernsey County became the

capital of the raw material for the U.S. industrial

revolution. Good number seven Cambridge coal

was wanted by all and spurred

many an investor to become bond

holders for one of the many

mines that would spring up.

Depending on when you got in

on the strike, some got paid,

some didn’t.

You see, these strikes are

just that. They create a fever pitch on both sides and are cycli-

cal going up, up, up one month and just as quickly falling off

the map the next month. Hand in hand with this comes the

money, the excitement, the anxiety, and most of all the influx

of new people. This is what I will be writing about over the

next several months, as we are in the very beginning stages of

a huge “gold strike”, black gold that is, Texas tea. I can’t wait

to see what is going to happen, and in turn, I will try to write

about many of the questions and things that you may be ask-

ing yourself why this is so.

I have already seen and smelled oil from one of the local

wells that has been drilled. It smells like money. Otherwise,

why would some of the largest companies in the oil and gas

world be in our backyards? With some more good results, this

may be the tsunami I have been predicting for the last three

years and we may only be at the beginning. So, let usa begin

to understand what will take place. Educate some on what to

look for and, as always, it’s not the miner who generally

makes the money. It’s the guy that owns the dry goods

store.

A ‘TSUNAMI’ that smells like money

Donald J. GaddIndependent Landman

39 years

‘With some more good results, this may be the tsunami I have been predicting for the last three years and we may only be at the beginning.’

Page 19: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 17

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Page 20: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications18

A Pennsylvania com-

pany serving the

oil and gas industry

is expanding its operations

to Barnesville and bring-

ing with it an estimated 100

jobs in the next three years.

In February, Bryan Force,

president and CEO of Force

Incorporated, headquar-

tered in Indiana, Pennsyl-

vania and state, county,

township and village of-

ficials announced that the

company is leasing the former M & S Auto building on

State Route 147.

Belmont County Port Authority Director Larry Merry said

the announcement was the first of many such projects coming

to Belmont County. “We are thrilled to welcome Bryan Force

and his company to Belmont County,” Merry said.

Thirty-year-old Force said he began the company 11 years

ago, after having three years experience in the oil and gas in-

dustry.

Force Incorporated provides oil field services that include

excavating, water hauling, “frack” job set up, spill contain-

ment, roustabout service, construction aggregate and building,

repair, modification and maintenance of oil and gas production

equipment, sites, wells and pipelines. Their asphalt services in-

clude asphalt paving, soil stabilization and road milling.

“We will be implementing all fac-

ets of our business here in Ohio,”

Force said. He said the Barnesville

yard will be the staging area for the

growth of the company’s tank ser-

vice line in the area.

He predicted that his company is

the first of many to bring their busi-

ness from Pennsylvania to this part

of Ohio.

“If the Utica shale has as good oil

play as the Marcellus has had gas

play, many companies will be shift-

ing their rigs to Ohio,” Force said.

“It is phenomenal what we’ve seen

in the Marcellus play. We’ve been fortunate to have helped im-

prove the economy of many Western Pennsylvania communi-

ties.”

“We are fortunate to have found a facility like this in this

location,” he continued, credited the Jefferis family for helping

him. “I finally found a facility I can grow into instead of out

of,” he said.

Merry also commended the Jefferis family whom he said

were “private enterprise at its finest.” “They chose to sell the

building to the company that would have the most dramatic

impact on the community,” Merry said.

Force said one of the company’s

top three customers has a distribu-

tion well in Barnesville and Force

is expected to begin serving them in

March.

“We are really excited to get out

here,”Force said. “This is an un-

tapped area for employment.” He

predicted that 75 to 100 people will

be hired out of the yard in the next

three years. “I think that will be an

easy goal to reach with the amount

of business pending in the area.”

Force said the company, which in-

cludes his brother, Chris who serves

as vice president, is looking forward to becoming part of the

community.

Belmont County Commissioner Matt Coffland thanked

Force for choosing Belmont County.

“I think you will find good people and a good place in

Force Incorporatedbringing jobs to Belmont County

Bryan Force, president and CEO of Force, Incorporated of Indiana, Pennsylvania addresses the public and state, county, township and village officials on Monday, Feb. 13when it was announced that the company has leased the former M & S Auto building on State Route 147. Force saidhe plans to hire 75-100 people at the Barnesville location within the next three years.

Cathryn StanleyDix Communications

“If the Utica shale has as good oil play as the Mar-cellus has had gas play, many companies will be shifting their rigs to Ohio.”

Page 21: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 19

Barnesville,” he said.

“I don’t think you’ll find a more receptive community than

Belmont County and Barnesville,” said Commissioner Ginny

Favede. “They are good people in a close-knit community,” she

said.

“This is a tremendously exciting time for us,” she continued,

mentioning an upcoming oil and gas expo and the promotion of

area chambers of commerce on an oil and gas Web site. “The

oil and gas industry is a small world and we are excited to

know that Belmont County is in that world,” she said.

“This means opportunities for local families,” Merry said.

Barnesville village officials, the Warren Township board

of trustees and developer T.J. Jefferis, who owns the building

and surrounding acreage are currently working on a Joint Eco-

nomic Development District agreement to extend sewer lines

to the property. A hearing on the JEDD was held on May 22.

The Belmont County Board of Commissioners also own acre-

age within the proposed JEDD area. Future development of the

area in response to the needs of oil and gas workers is expected.

Cathryn Stanley is editor of The Barnesville Enterprise, a weekly newspaper in Belmont County.

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Oil & Gas June 2012 Edition - Dix Communications20

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Dix Communications - Oil & Gas June 2012 Edition 21

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Page 24: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications22

Just days after the Ohio

Senate approved Sen-

ate Bill 315, executives

from the Ohio Department

of Transportation Ohio

Department of Natural Re-

sources, and the Governors

Office of Appalachia met

with local officials to ex-

plain part of the bill that

refers to the model Road

Use Maintenance Agree-

ment (RUMA), initiated

and developed by county

and township officials, the oil and gas industry, ODOT,

ODNR and other entities that are, or could be, affected

by road use agreements. The meeting was at the Cross-

roads Branch Library in Cambridge.

In addition to visiting Guernsey

County, the group traveled to Noble,

Morgan, Belmont and Muskingum

counties to educate local govern-

ment officials and establish an out-

reach for the public when they have

questions about the state’s role in the

agreement, and how it will impact

local communities.

According to ODOT Director

Jerry Wray, SB 315 strengthens ex-

isting regulations for drilling, pub-

lic safety, the environment, and to

establish a mutual understanding of

what is expected from the oil and gas

industry, the county and the townships. He emphasized that the

state’s version of the RUMA is only a model.

“This is a starting point. We are providing tools for protect-

ing our infrastructure ... Each county and township can modify

the agreement to suit their particular needs. The quality, condi-

tions and logistics of county and township roads are unique

and have to come into consideration. This legislation will give

the agreement more visibility in the permitting process,” said

Wray.

Carlo LoParo, chief of communications for the ODNR, said

SB 315 changes the process for oil and gas operators.

Currently, the operator does not need a permit for road ac-

cess. We are hopeful the Ohio House will approve the legisla-

tion by early fall.

“The agreement is not mandatory. Operators do not have to

sign the agreement, but they cannot ignore it, either. If they do

not sign the agreement, they must file a signed affidavit stating

they negotiated in good faith but could not reach an agreement

with the county or township. If the county/township finds it un-

acceptable, their recourse is in the court system,” said LoParo.

Guernsey County Commissioner Steve Douglass and Guern-

sey County Engineer Delmar George were among the meet-

ing’s attendees.

Douglass said even though there has been a road use agree-

ment in effect for many years, in the past when directional

(vertical) drilling was the only option for drilling a well, a lim-

ited amount of vehicles and equipment was used in the pro-

cess. With the advent of horizontal drilling, it’s a whole new

ball game. The amount of equipment and trucks required for

the process has tripled, not only in the amount of equipment

and number of trucks, but in size and weight. Especially with

the number of trucks. Because of the millions of gallons of

water required for hydraulic fracturing, and unless the well

pad is close to a pipeline, all that water must be trucked in

— constantly — which adds to more wear and tear on roads

and bridges. A section of the agreement also includes railroad

crossings. Work performed at a railroad crossing may contain a

separate agreement at the railroad’s discretion.

George reiterated “We want our county and township roads

to be as good as they are or better.

We aren’t asking for the moon, we

just want the operator to follow the

rules.

“The RUMA is a mutual agree-

ment between two parties. We mod-

eled our agreement after Jefferson

County’s, but tailored it to fit our

needs. Each county operates dif-

ferently, but every operator will be

treated the same — big or small.

RUMA provides protection for both

the county and the operator. Our

primary concern is safety. It is our

responsibility to provide a safe in-

frastructure — roads and bridges — and that includes culverts

that are 36 inches or larger. There are also required to post a

bond for $300,000 per mile of roads they access.

“We want to meet with these companies that are coming into

our area and talk about access roads they would like to use. We

believe we can help them ... We are offering our services. We

want to do whatever we can to make sure they understand what

and where potential problems can arise. We have a road use

maintenance agreement that defines the operator’s, the coun-

ty’s and the townships’ responsibilities.”

The model Roadway Use and Maintenance Agreement for

horizontal drilling projects and infrastructure in Guernsey

County includes term and conditions that both parties agree

to. And, although there a dozen stipulations, the language is

not complicated or misleading. It also includes an appendix

which designates anything else agreed to by both parties, such

as plans prior to construction, or if the county or township

doesn’t want anything in the Appendix, that is their option. The

parties could also address if more than one operator is involved

on the same route.

[email protected]

Region studies use of roads for oil and gas industry

Judie PerkowskiDix Communications

“We want to meet with these companies that are coming into our area and talk about access roads they would like to use. We believe we can help them.”

Page 25: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 23

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Page 26: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications24

The Buckeye STEPS

Network was recent-

ly formed to address

safety concerns related to

the growing oil and gas in-

dustry and the impact on

the local community.

“It is a proactive engagement

for the oil and gas industry to

be actively interactive with

local companies, as well as

federal, state and local govern-

ments, to understand the con-

cerns and fears regarding safe-

ty and create an environmental stewardship,” said Joe Greco.

“The network’s objective is to get the worker home safely.

“The program promotes safety, health and environmental

improvement in the exploration and production of oil and gas

in the U.S. We will follow national STEPS protocol. Our prior-

ity is safety,” added Greco.

The Buckeye STEPS Network based in Cambridge is form-

ing partnerships such as one with the Haven of Hope to assist

families in the event of an injury or death related to the oil and

gas industry.

“While you are never prepared for an injury or a death, they

(Haven of Hope) know what it means and they can help fami-

lies ease into it,” said Greco.

The network also works closely with the Occupational Safe-

ty & Health Administration and the Environmental Protection

Agency.

The Buckeye STEPS Network will meet periodically to share

and discuss safety, health and environmental incidents, best

practices and related issues; establish focus groups to address

specific issues; and work with organizations and associations,

educational institutions and others interested in the advance-

ment of worker health, safety, security and the environment.

Buckeye STEPS Network meets the first Friday of each

month, although next month the group will meet on June 8.

The original STEPS (South Texas Exploration and Produc-

tion Safety) network was formed in South Texas in October,

2003, in response to the OSHA Corpus Christi Area Office

reaching out to the Oil and Gas Exploration and Production

industry in an attempt to reduce injuries and fatalities.

In 2006, an OSHA Region VI regional administrator recog-

nized the STEPS Network as a best practice and encouraged

area directors and industry leaders to expand the program.

The first national STEPS Network meeting was held in

Houston, Texas, in December 2008.

The National STEPS Network includes operators and con-

tractors in oil and gas exploration, production and product

transmission industry as equally valued members. It encom-

passes the geographic region within the Continental United

States.

The national network promotes safety, health and environ-

mental improvement in the exploration and production of oil

and gas in US onshore operations. The National STEPS Net-

work fosters a work environment that relies upon open com-

munication and trust.

Today, the STEPS Network has grown to eight independent

organizations across the country with expansion continuing.

Visit nationalstepsnetwork.com for additional [email protected]

Industry takes ‘STEPS’ to be safe

Rick StillionDix Communications

“The program promotes safe-ty, health and environmental improvement in the explora-tion and production of oil and gas in the U.S. We will follow national STEPS protocol. Our priority is safety,”

Page 27: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 25

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Page 28: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications26

For eastern Ohio, these

days, business is good.

But we know that hasn’t

always been the case. Long before

anyone thought to develop the

vast natural resources beneath our

feet in the Utica Shale, and long

before it became a national con-

versation, Appalachia was mired

in a stagnant economic recession.

Ohio’s own gift, sitting thou-

sands of feet below the surface,

is bringing about an economic

revital- ization and promise

not seen in our area

in a generation.

This past

month, Hal-

liburton broke

ground on

their new re-

gional equip-

ment and field

service center

in Zanesville.

The move

comes with

an investment

of up to $50

million. Already,

the company has

hired more than

100 Ohioans, with

plans to hire up

to 300 in the near

future.

A few months prior,

MarkWest Energy Part-

ners invested over $500

million to develop natural

gas processing facilities in Har-

rison and Noble counties. The facilities

will create over 700 construction jobs,

with over 40 permanent, well paying

positions.

That’s in addition to the 100 jobs they will be

filling to staff their new field office in Cadiz.

Producers Services Corporation, a staple of

Muskingum County for the last 31 years, is preparing

to add 30-40 new employees to their operations to meet the

rapid increase in the demand of their services.

Head up north, and we’ll find something most people may not

remember - steel and manufacturing - prospering, expanding…

and hiring.

The opportunities for our region to benefit directly are bound-

less. Pipefitters, welders, construction workers, truckers and

more are already finding work. Our colleges and trade schools

are training (and retraining) members of our community to fill

the demands of a burgeoning industry now and in the years to

come.

As the industry prepares to expand in the coming years, we

must also do the same. We must all work together to ensure our

state and our communities are in the best position to benefit.

With the continued effort from our local government, our local

businesses and our local chambers of commerce, we can position

our region to attract more business, more investment and more

growth.

Eastern Ohio can be the hub of this rebirth.

With over 200,000 Utica Shale development related jobs

projected through 2015, we are in position to be the driving

force not only in our resurgence, but Ohio’s future and economic

prosperity as well.

Shawn Bennett is Field Director for Energy in Depth-Ohio,

a research, education and public outreach campaign.

For Eastern Ohio, these days, business is good

Shawn BennettEnergy in Depth – Ohio

Chainhand chain•hand noun: an experienced laborer capable of maintaining most

parts of the rig. The chainhand is in charge of throwing

the chain to make up or break down pipe stands during

tripping pipe. They are also responsible for maintaining

the motors on the drilling rig.

Ohio’s own gift, sitting thou-sands of feet below the surface, is bringing about an economic revitalization and promise not seen in our area in a generation.

not se

Muskingum County for the last 31 year

gy p

n a

T

mon

libu

gro

the

gio

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in

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up

llio

co

ed m

Oh

s to

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w m

st E

d o

elop

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s. T

uct

ell

the

in C

sta

rs i

in

m

l

a

of

mil

the

hire

100

plans

to 300

future.

A few

MarkWes

ners invested

million to deve

gas processing facil

rison and Noble counties

will create over 700 constru

with over 40 permanent, w

positions.

That’s in addition to the 100 jobs t

filling to staff their new field office i

Producers Services Corporation, a

Muskingum County for the last 31 year

Page 29: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 27

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Lisa Loos/Dix CommunicationsAn oil and gas well site along a clearing on Route 285 at Windy Ridge Road in Seneca Township, Noble County. More than 100 red fracking tanks were delivered to the site earlier this month. Each tank reportedly holds 21,000 gallons. A message on a tire tells passersby what to do: “Stay Out.”

Page 30: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications28

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Page 31: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 29

10037414

Page 32: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications30

j

Many years ago in this neck

of the woods, crude oil wasn’t

thought of as “black gold” and

folks weren’t anxiously await-

ing the money spigot to

turn on, as they are

today.

In fact, there was

a time when oil was

considered a pain in

the posterior.

In the early

1800s, an oil find

was met with dis-

interest or dismay.

Pioneers who settled here dug wells to find water

or brine, a source of salt. They were disappointed

when they found oil.

According to the local history Stories of

Guernsey County, Ohio by William G. Wolfe

(published by the author in 1943), the oil in-

dustry in Guernsey County had its beginning

shortly after the coming of the first settlers.

An oily substance discovered on the waters

of what is now the upper course of Wills

Creek attracted their attention. Although, as

afterwards learned, it was common petro-

leum that had oozed from the ground, it was

called Seneca oil, because it was believed

to be the same kind of oil as that found in

New York and named for an Indian Tribe.

The name Seneca was given the creek,

and a town platted near the stream at a

later date and was called Senecaville.

The oil was collected by wringing it

from blankets that had been spread

on the surface of the creek. The

crude oil was believed to pos-

sess medicinal qualities. Ped-

dlers would procure a supply

and canvas the pioneer homes,

guaranteeing it to be a sure cure

for rheumatic and other aches

and pains.

It was not until the sinking

of a great well in 1859 by Col.

Edwin Drake at Titusville, Pa.,

that any consideration was

given the oil and gas possibili-

ties of Guernsey County.

Much excitement followed

the Pennsylvania strike, and when the report reached some pros-

pectors there that oil had floated on the waters of Seneca Creek

and that some had been found here by drillers for salt, they came

out to view the Guernsey County field.

The Jeffersonian of April 5, 1861, quotes one of them, as

follows: “I can see no reason why your county is not full

of oil, in fact, I feel sure of it.”

About this time oil also was found on Duck Creek in

Noble County, and the excitement there rivaled that in

Pennsylvania.

According to Wolfe, the excitement extended into

Guernsey County, and drilling began in the area of

Cumberland. The Jeffersonian, which kept its readers

informed weekly as to the progress made in the drill-

ing, reported in April 1861 that a well had reached

a depth of 90 feet and a strike was expected at any

time. Wells were drilled in 1861 at Cambridge, Old

Washington, Middletown, Kimbolton and other

places. As all were shallow wells, not much oil or

gas was found.

“For several reasons this first Guernsey County

oil excitement died down in a few months,” Wolfe

wrote. “The prospectors were not acquainted

with the business. Holes were sunk in a haphaz-

ard way. The immense production in Pennsyl-

vania had so lowered the price of oil that the

industry ceased to be attractive, then the Civil

War opened and diverted the attention of the

people to other things.”

Not until 10 years later was there a re-

vival of interest in Guernsey County oil and

gas. The following appeared in the Guern-

sey Times of Nov. 3, 1870. “Within three

miles of Cambridge, in a direct line on the

premises of David Sarchet Sr., is an inex-

haustible salt well, from which constantly

flows a stream of salt water several inches

in diameter, and with it a large and con-

stant supply of natural gas. We have the

authority of a scientific gentleman

from the East, who visited this well

during the oil excitement here, for

saying that there is an abundance of

gas flowing from this well to light

up a place much larger than Cam-

bridge, and that it could easily be

conducted here for that purpose at

very great costs; and he expressed

great surprise that steps had never

been taken to utilize so valuable

a production of nature. The sub-

Oil in the early daysA history of the business from the settlers to the late 1920s y

Greg ParksDix Communications

Page 33: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 31

ject is one that should sufficiently claim the attention of the city

fathers as to cause them to make such investigation of the matter

as to ascertain the feasibility of the plan.”

But the city fathers did nothing, according to Wolfe, and the

people of Cambridge continued to use the kerosene lamps. About

1885, oil and gas were found near Lima and Findlay, Ohio. The

excitement resulting from these discoveries reached into Guern-

sey County. There still lingered the belief that oil and gas could be

found here. Prospectors from Pennsylvania came into the county

again, and began drilling in Senecaville. Seneca oil had never been

forgotten. The drilling there was abandoned on account of a strong

flow of salt water. Testing was done in other parts of the county.

On the Hutton farm in Jackson Township a well was drilled that

produced 21 barrels of oil a day. Three or four wells were sunk

to the Berea sand at Quaker City in 1886-87, and some gas was

found, which was utilized locally. About the same time a well near

Kimbolton produced a moderate flow of gas. Three wells drilled

in Cambridge Township prior to 1892 yielded gas in paying quan-

tities. Oil was found at the edge of Senecaville in 1897, at a depth

of 167 feet.

Before 1900, the most productive gas field in Guernsey Coun-

ty was the Harmony field in Jackson Township. The Cambridge

Light and Fuel Company had several wells there, some of which

produced from 1,000,000 to 2,000,000 cubic feet a day. This was

piped to Cambridge and Byesville.

For several years following the oil and gas activities of the

1880s and 1890s, the interest for languished but never died. Some

venturesome prospectors would lease land and sink wells and oc-

casionally make strikes.

Oil was found in Lore City and Monroe Township. The produc-

tion was not large at either place.

Guernsey County had its greatest gas boom during 1926-27.

Drilling activities were most extensive in Knox, Adams and West-

land townships, in which there were more than 100 heavy produc-

ing wells. One of the first of these was drilled in the northwestern

part of Knox Township by the Ohio Fuel Gas Company. The ini-

tial yield of this well was beyond the measuring capacity of any

available instrument, according to Wolfe. However, it was claimed

to be from 50,000,000 to 75,000,000 cubic feet a day.

Immediately following this sensational strike, a number of

companies began drilling and wells yielding from 2,000,000 to

30,000,000 cubic feet a day became numerous. The field was ex-

tended as the drilling advanced. By the close of 1927 fairly defi-

nite boundaries were established, showing it to be a strip about

four miles wide and 25 miles long, extending from northeast to

southwest. It not only included Knox, Adams and Westland town-

ships, but extended to Jackson, Wheeling, Monroe and some other

townships.

A 12-inch distributing main was laid by the Ohio Fuel Gas

Company and much of the product carried to points in Ohio, West

Virginia, Pennsylvania and Michigan.

Following the gas strikes, oil was found in the southern part of

the territory. Some of the oil wells were said to yield from 50 to

300 barrels a day.

At the close of 1927, there were about 40 wells producing oil in

Jackson and Westland townships. This was sent to the refineries of

Parkersburg, W.Va., through a main laid by the Buckeye Pipe Line

Company. Much oil was found in Wheeling Township, and this,

too, was piped to refineries.

Page 34: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications32

Infinity Oilfield Servicesopens site in Newcomerstown

The anticipated oil

and gas boom in

Ohio has prompted

one company to re-locate

to Newcomerstown — and

with that — bringing more

than 50 jobs to Tuscarawas

County.

“Ohio should be bigger than

Texas in the oil and gas (indus-

try) — that’s what they are say-

ing,” said Kevin Glazer, who is

in field operations/dump truck

manager at Infinity Oilfield

Services in Newcomerstown.

Chad Kerns is the operations

manager of the Ohio yard for Infinity Oilfield Services LLC.

Infinity Oilfield Services is based out of Williamsport, Pa.

Glazer, who once drove a truck for a living, switched careers

and joined Infinity

Oilfield Services in

Newcomerstown.

The Newcomer-

stown operation

just opened in May.

Right now, he

said they are most-

ly working in the

Carrollton area.

But, he said their

trucks, which sup-

plies water as well

as stone/gravel for

maintaining the

road into the oil

well, will go within a 100-mile radius of Newcomerstown.

However, he said there are workers from the Newcomerstown

location working along the Ohio River supplying water to oil

wells. They take a van from Newcomerstown to the river where

their trucks are located.

“We’ll pretty much go where they (oil well supervisors)

want us to go,” he said. “We never know on a day-to-day what

we’re going to get into.”

Glazer said his employees work a 12-hour shift (6 a.m. to 6

p.m.) and work four days on and have two days off, but their

days off are never the same two days.

Soon, mechanics will be coming to the Newcomerstown site

and trucks will be repaired in-house.

In Newcomerstown, they have 30 water trucks and will have

another 20 more by the end of the month. However, they also

have 10 specially-made chrome dump trucks from San Anto-

nio, Texas, that are used to haul stone and gravel for the road

Niki WolfeDix Communications

Kevin Glazer of Infinity Oilfield Services in Newcomerstown stands in front of a row of the large water hauling trucks (they are also known as "straight trucks") that are used at oil and gas well production sites.

Chad Kerns is the operations manager of the Ohio yard for Infinity Oilfield Services LLC.

10039388

Cheri Hill, Manager

(740) 439-7777P.O. Box 1837

Cambridge, Ohio 43725 WHISTLING PINE HOMES

(330) 852-2466

Page 35: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 33

into the well site. More dump trucks are expected to be added to

the fleet.

As far as hiring more drivers, Glazer said they are always taking

applications. He said drivers, both men and women, must have a

CDL, Class A, license with no Hazmat endorsement.

To learn more about Infinity Oilfield Services, visit www.infini-

tyoilfield.com or stop by their Newcomerstown location which is

behind the Newcomerstown Truck Stop on Adena Drive.

“Right now, we’re in a good location, between I-77 and US 36,”

Glazer said. “We can go four different directions.”

And they are looking forward to what Ohio has to offer — be-

neath the ground. Looking at the computer, Kevin Glazer of Infinity Oilfield Services in Newcomerstown looks at what orders they have for the upcoming days.

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Page 36: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications34

IT’S HAPPENING HERE... it’s happening now

The Ohio Oil and Gas Energy

Education Program (OOGEEP)

is a non-profit statewide educa-

tion and public outreach program.

As one of only two organiza-

tions of it’s kind in the country,

we provide a variety of programs

throughout the state, focusing

primarily on teacher workshops,

scholarships, student education,

firefighter training, and research.

One of our most vital func-

tions, however, and one of utmost

importance now and in the years

ahead, is the development of our

industry workforce.

Last September, we released

our 2011 Economic Impact Study, providing the first compre-

hensive analysis about how planned development in Ohio’s Utica

shale formation could impact the state in the coming years.

And with projections of over

204,000 Ohio jobs created and

supported by the development of

this geological gift, the positive

impact it will have in eastern Ohio

and beyond is nothing short of as-

tounding.

In the few short months since

the study’s release, we are already

seeing the benefits of shale de-

velopment come to fruition with

enormous and immediate gains in Ohio’s workforce. Reported

employment tied to shale development has surpassed our initial

projections with over 6,000 reported jobs created or supported by

the industry.

The long dormant steel industry has returned to Youngstown

and Lorain as plants prepare to meet the demands of an invested

and optimistic oil and gas industry.

Ohio, a state that has witnessed countless companies – and in-

dustries – leave it’s borders, is now welcoming new parties con-

tributing incredible assets and creating new jobs in our communi-

ties.

Billions of dollars in investments have poured into our state by

these companies seeking to create the needed infrastructure re-

quired to develop these untold volumes of energy.

In short – it’s happening here, and it’s happening now. The op-

portunity to continue grow our economy is tied directly to contin-

ued success in the Utica Shale.

However, it is important to recognize we are still in the very

infancy of this movement. In order to ensure continued success,

we remain fully committed to the development of Ohio’s most

valuable resource – our dedicated work force.

The next few years are critical to Ohio’s economic rebirth. As

we work through the leasing and

exploration phase of development,

our organization and the industries

driving this recovery are working

diligently with education centers

and training facilities across the

state to ensure Ohioans are best

prepared and best positioned to fill

the jobs that will soon be in high

demand.

Ronda Reda is executive director of the Ohio Oil and GasEnergy Education Program.

Rhonda RedaOhio Oil and Gas Energy Education

Program

Billions of dollars in investments have poured into our state by these com-panies seeking to create the needed infrastructure required to develop these untold volumes of energy.

61077 Southgate ParkwayCambridge, OH 43725Phone: (740) 995-3158Cell: (330) 795-8552

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Page 37: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 35

1003

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Bobby Elam District Manager

David Martin North Division Ops Manager

8583 Georgetown Rd., Unit ACambridge, OH 43725

8583 Georgetown Rd., Unit ACambridge, OH 43725

phone (740) 255-5393cell (740) [email protected]

phone (713) 338-1505

[email protected]

Page 38: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications36

10039394

CRUDE AWAKENING

Utica Shale127 Wells Permitted25 Wells Drilling43 Wells Drilled16 Wells Completed10 Wells Producing1 Wells Plugged

221 Total Horizontal Permits

OHIO WELL ACTIVITYby the numbers

Data as of 5/21/12Source: Ohio Department of Natural Resources

Marcellus Shale8 Wells Permitted0 Wells Drilling3 Wells Drilled4 Wells Producing

15 Total Horizontal Permits

Page 39: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 37

Offi ce: 740-435-0003 Toll Free: 877-435-0003

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Page 40: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications38

Industry leader comes toSoutheast OhioH

alliburton, a leading provider of innovative

products and services to the energy industry,

is pleased to be one of the newest members of

Zanesville-Muskingum County’s business community.

Halliburton’s history in Ohio can be traced to the 1950s,

and with the recent groundbreaking for our new site in

Zanesville, we are excited about strengthening our roots

in Ohio once again.

The Zanesville facility will be a full-service center support-

ing eight or more of Halliburton’s business lines. The site will

measure approximately 135,000 square feet and house an ad-

ministration office, maintenance shop, general warehouse and

bulk storage facilities for sand and cement.

Halliburton has already hired more than 100 Ohio residents

in preparation for the opening of the new facility, which is ex-

pected to employ approximately 300 people. Job openings in-

clude field operators, field engineers, diesel mechanics, materi-

al handlers, and some management and administrative support

functions. Please visit www.gohalliburton.com <http://www.

gohalliburton.com> to view and apply for job openings and to

learn about Halliburton’s competitive compensation packages.

At Halliburton, we are committed to being a good corporate

neighbor by devoting time and resources to charitable organi-

zations and educational institutions wherever our people live

and work. Each year around the world, our employees com-

plete hundreds of community projects and donate thousands

of volunteer hours. We look forward to building strong ties in

the Zanesville community and to serving our customers in this

region for many years to come.

Halliburton has already hired more than 100 Ohio residents in prepa-ration for the opening of the new facility, which is expected to em-ploy approximately 300 people.

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Page 41: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 39

Halliburton broke ground Tuesday in the EastPointe Business Park east of Zanesville. Participating were, l to r, Jeff Hibler, vice president of Halliburton; Ron Hall, senior vice president; Ohio Gov. John Kasich; Mike Jacoby, executive director of the Muskingum County Port Authority; and David Mustine, general manager of Jobs Ohio.

HALLIBURTON

© 2012 Halliburton. All rights reserved.

Solving challenges.™

While we’re now in 80 countries around the world, we’ve never forgotten our roots.Halliburton has had a business presence in Zanesville, Ohio, dating back to the early 1950s.

Since then, we’ve opened additional facilities throughout the state. Now, with exciting

opportunities emerging in the Utica shale play, Halliburton is returning to its Ohio roots by

increasing our presence in Zanesville with the construction of a new facility—and taking our

place as a major area employer.

Thanks to new local opportunities, Halliburton is hiring. Please visit www.gohalliburton.com

to view our job opportunities. For more information about Halliburton, visit us online at

www.halliburton.com.

10039236

Page 42: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 43

1003

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634 Lincoln Ave. Cadiz, OH 43907

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102 North River St. Newcomerstown, OH 43832

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Page 43: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications44

Thomas E. Stewart, executive vice president of the Ohio Oil and Gas Association, said recently that the Ohio Business Roundtable’s analysis of Gov. Kasich’s proposal to increase the severance tax on oil and natural gas producers through-out the state is based on several fl awed assumptions.“The study, conducted by Ernst & Young, drastically under-

estimates the up-front cost of developing a horizontal well,” Stewart said in a news release. “The cost of an average horizontal well in Ohio is between $8 and $12 million, far more expensive than the report’s assumption of $4 million per well. The report also assumes that an average Ohio well will produce 90,000 barrels of natural-gas liquids in the initial

year of operation. “We’re also very curious as to why the CEOs and business

leaders that comprise Ohio’s Business Roundtable wouldsupport a tax increase on another business, particularly when they pay a commercial activity tax (CAT) rate of just 26 cents per $100 in revenue, while asking one industry to paya rate nearly 16 times higher.”The Ohio Oil and Gas Association is a trade association

with more than 2,500 members involved in the exploration,production and development of crude oil and natural gas re-sources within the state of Ohio. For more information, visit www.ooga.org.

Association opposes Kasich proposal

10039584

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Page 44: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 45

The Ohio Senate ap-

proved legislation

Tuesday honoring

environment-minded oil

and gas drillers.

Senate Bill 328 would re-

quire the Ohio Department of

Natural Resources to create the

Governor’s Award for Environ-

mental Stewardship, targeted

at companies and individuals

involved in the oil and gas in-

dustry who represent “wise en-

vironmental stewardship.”

“It will allow Ohio to show

its appreciation to those who balance productivity with con-

servation, profitability and growth with smart-minded steward-

ship,” said Sen. Troy Balderson, a Republican from Zanesville.

The final vote was 30-1, and the legislation heads to the Ohio

House for further consideration.

Potential honorees could be nominated by lawmakers, pri-

vate citizens or industry representatives, under rules that would

be developed by ODNR.

The latter also would be responsible for setting procedures

for selecting a winner and for designing “a plaque or other

commemorative item, according to an analysis by the state’ s

legislative service commission.

“I have been told by members of the oil and gas industry that

this type of program has been very successful in other states

and that similar awards have been highly sought after,” Balder-

son said. “It is my hope that this bill ... will play a small role

in encouraging mindful stewardship on the part of those many

businesses across the state.”

Sen. Michael Skindell, a Democrat from the Cleveland area,

cast the lone no vote.

“It’s my belief that it’s the governor’s prerogative to grant an

award and that decision should lay within the governor’s office,

that this legislature should not be dictating to the governor in

granting awards in this type of field,” he said. “And I think the

legislature is overstepping its bounds.”

Marc Kovac is the Dix Capital Bureau Chief. Email him [email protected] or on Twitter at OhioCapitalBlog.

Senate passes billCreates annual environmental award for oil and gas drillers

Marc KovacDix Capital Bureau

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us

Ber

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Oil & Gas June 2012 Edition - Dix Communications46

Ohio’s rich natural gas and crude oil reserves provide many opportunities to help the state’s economy grow and prosper.• The industry’s 4,490 direct jobs and another 12,950

indirect jobs support a total of 17,440 Ohio jobs.• The industry is responsible for $793 million per year

in Ohio salaries.• Ohio keeps $793 million per year in the state when

buying locally produced natural gas and crude oil.• Ohio consumers save $30 million per year in avoided

interstate pipeline transportation costs, and another $9.2 million per year due to the price reducing impact of local natural gas supplies.

• The industry reinvests $238 million annually on explo-ration and development.

• The industry pays over $32.7 million annually in local, state and federal taxes.

• The industry generates approximately $988 million in gross state product and a statewide output or sales of $1.7 billion per year.

The industry paid over $90 million in royalties and pro-vided another $61 million in free gas last year to local landowners (mineral interest owners) including farmers,

businesses, schools, churches and local governments with wells on their property.• Ohio’s a national energy leader in natural gas and

crude oil production.• Ohio is ranked fourth in the total number of wells

drilled. Ohio has drilled over 273,000 wells to date, followed only by Texas, Oklahoma and Pennsylvania.

• Ohio drilled 460 new wells in 2011.• Ohio produced 4.9 million barrels of crude oil in 2011.

Today, crude oil is refi ned into more than 6,000 ev-eryday products including medicines, personal care products, plastics, synthetics and fuel.

• Ohio produced 73 billion cubic feet of natural gas in 2011, creating enough energy to heat over 1 million Ohio homes and businesses. Nearly 7 out of every 10 homes are heated with natural gas.

Almost 100% of the Ohio natural gas produced remains in the state.• Ohio’s natural gas and crude oil production has one

of the smallest environmental surface footprints of anyenergy source.

• Advances in technology leave smaller footprints and less surface disturbance.

Oil & Gas Fact Sheet

110 years ago, Peoples Bank was built by oilmen and backed by the idea that working together matters. Today, we continue to honor that tradition by serving the business and personal clients who are part of the oil and gas industry in our communities. By working with you, we’re focused on building your success. Whether you need strategies for wealth management or lending options for your oil and gas business, Peoples Bank has the programs, the people and the proven history to turn your dreams into reality.

Our Foundation, Your Future.

At Peoples Bank, our history is tied to your success.

We are your oil and gas partner dedicated to serving you. Call or visit us today.

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Dix Communications - Oil & Gas June 2012 Edition 47

• The average well site footprint today is 30 percent of the size it was in 1970. Today, Ohio well sites are typi-cally the size of a family dining room, and the actual well has a diameter about the size of a soccer ball.

• Specifi c environmental laws and regulations are regularly inspected and supervised by the Ohio De-partment of Natural Resources (ODNR) Division of Mineral Resources Management (DMRM)and other government agencies.

Ohio’s industry is continuing to create energy, econom-ic and lifestyle benefi ts ---yesterday, today and into the future.

Ohio’s natural gas and crude oil producers are truly Ohio’s most dependable energy farmers. They choose

to participate in a high risk business, and they are ac-customed to working long hours and operating under adverse weather conditions. Innovations, perseverance,and hard work are key to survival in an industry built ona variety of uncertain conditions geological, economi-cal and operational. Through an ongoing commitment of Ohio’s natural gas and crude oil producers, the domesticindustry remains strong.

Ohio’s supply of natural energy resources is indeed signifi cant. As the states supply adds to the national sup-ply, our resources are helping keep prices in balance, while also helping us be more independent from foreign energy supplies.

Contact theCommunity Improvement Corporation of Noble County

740-509-0248

Contact theCommunity Improvement

Corporation of Noble County740-509-0248 10039706 10039585

Photo by Kevin Graff, The Alliance Review

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Oil & Gas June 2012 Edition - Dix Communications48

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Page 48: June 2012 Oil & Gas

Oil & Gas June 2012 Edition - Dix Communications40

Mud Mud noun: Slang term for drilling fluid. A Mud Man is the drilling

fluids technician responsible for formulating the mud,

while a Mud Logger checks mud cuttings from the drill

bit for traces of rock or oil and gas that provide a picture

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Page 49: June 2012 Oil & Gas

Dix Communications - Oil & Gas June 2012 Edition 41

Carpentry LTDJ&M

Estimates

“Generations of Amish craftwork with modern, professional site management”

AgriculturalResidentialCommercialAny SizeCustomPole BarnsGarages BarnsStablesRiding ArenasHorse BarnsShedsOutbuildingsDecks Metal Roofing

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Oil & Gas June 2012 Edition - Dix Communications42

TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY(By number of sites)

1. Carroll County ..........782. Columbiana County ..343. Jefferson County .......254. Monroe County ......... 215. Harrison County ....... 126. Belmont County ........ 10 Stark County ............ 107. Mahoning County ......98. Guernsey County .......7 Noble County ............7 Portage County..........79. Tuscarawas County ....510. Muskingum County ....311. Coshocton County ......2 Trumbull County ........2 Knox County .............212. Geauga County .........1 Ashland County .........1 Medina County ..........1

Well Sites in various stages: Permitted, Drilling, Drilled, Completed, Producing, PluggedSource: Ohio Department of Natural Resources

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